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Tag: Union Budget 2024

  • Technological and Startup Ecosystem in Budget 2024-2025

    How Budget 2024-2025 Supports Innovation and Growth

    The Union Budget 2024-2025, presented by Finance Minister Nirmala Sitharaman, has laid out a comprehensive framework to bolster technological innovation and support the startup ecosystem in India. The budget introduces several key initiatives aimed at reducing tax burdens, simplifying compliance, and fostering an environment conducive to innovation and growth.

    Dilip Chenoy, Chairperson, Bharat Web3 Association

    “The nine focus areas of budget 2024 are key steps towards our goal of Viksit Bharat. The budget also lays out a clear framework for digitisation of various sectors, where Web3 technology could play a critical role. We were hoping for some relaxation to the taxation framework on VDAs in this budget, but the absence of any announcement is not particularly disheartening, given the Govt’s overall negative stance towards the sector.

    We have submitted data-backed quantitative analyses regarding the flight of users’ trading and transactions, as well as the potential increase in government revenue should the taxation structure be revised. We will continue to push for rationalization of the taxation framework, which includes reducing the TDS to 0.01%, allowing setoff of losses on VDA transactions and modifying the 30% tax on capital gains. We are hopeful that the government will consider our requests and that we will see changes in the future. On the positive, abolishing the angel tax for all classes of investors will work towards bolstering the Indian startup ecosystem. We look forward to more Web3 startups setting base in India, given India’s immense Web3 talent and potential. Finally, the impetus provided to blockchain skilling and talent development in the Economic Survey can empower youth for the exciting opportunities in Web3 and contribute to a skilled ecosystem for Web3 adoption.”

    Shivam Thakral, CEO of BuyUcoin, India’s second-longest running digital asset exchange
    “We welcome the positive announcements made by the honorable finance minister in today’s budget. However, the demands of the Web3 sector were not met and we will continue our constructive dialogue with the regulators to address the industry concerns. Here is our analysis of the Union Budget 2024: Angel tax abolished: India’s startup ecosystem received a big boost in today’s budget as the angel tax is abolished for all classes of investors.
    This move will be a gamechanger for startups planning to raise funds for their expansion as it will give startups more surplus funds to invest in product innovation and technology development to implement their long-term vision for the industry. The move will encourage a lot of innovators to start their entrepreneurial journey and VCs will find it more convenient to invest in early-stage startups. With deep-tech, blockchain and emerging technologies in focus. VCs will be keen to bet on innovative technologies to facilitate the transition from Web2 to Web3. TDS on VDAs untouched: However, Web3 as a sector was slightly ignored in the budget as the request to reduce the TDS on VDA transactions was not accommodated in the budget announcement. The delay in reducing the TDS will hamper the industry growth prospects as digital assets will not have a level playing field with other asset classes like stocks, gold and real estate. Higher tax and not allowed to offset gains: The high tax on gains from VDAs still stands at 30% which is relatively very high and the users are not allowed to offset losses like stocks. This move will prove to be detrimental for the web3 industry as it deprives the industry from a level playing field.
    Emerging tech in focus: In an encouraging move, the government highlighted the importance of technologies like blockchain and artificial intelligence. Government is actively involved in leveraging the potential of blockchain and AI for better governance and enhanced delivery of citizen schemes. At the same time, the economic survey also talks about the threats and challenges associated with Artificial Intelligence. The deep-fake incidents that occurred recently calls for a responsible use of emerging technologies through constructive collaboration between government and private players.”
    Mr. Kartik Chhaya, Chief Operating Officer, Rupeeseed
    “We welcome the Union Budget 2024’s forward-thinking approach, particularly the reduction in corporate tax rates for foreign companies and the simplification of FDI rules. These measures will enhance India’s attractiveness as a global tech hub. The focus on employment-linked skilling and the support for MSMEs, including the credit guarantee scheme, align well with our mission at Rupeeseed to drive innovation and growth in the fintech sector. Additionally, the emphasis on developing DPI applications and improving IBC outcomes will streamline processes and foster a more efficient financial ecosystem. Notably, the Budget’s move to address Angel Tax concerns for startup entrepreneurs is a significant step forward. By providing clarity and relief in this area, the government is helping to create a more supportive environment for startups, which is crucial for fostering innovation and attracting investment. Overall, this budget sets a robust foundation for technological advancement and economic growth, which augurs well for businesses.”
    Mr. Abhinav Jain, Co-Founder & CEO, Almonds AI
    “The Union Budget 2024 has delivered a landmark decision for India’s startup ecosystem. The abolition of angel tax for all investor classes is a game-changing move that signals the government’s unwavering commitment to nurturing our nation’s innovative spirit. This pivotal reform will inject much-needed momentum into our startup landscape, which has faced headwinds recently. By removing this significant barrier to investment, the Budget 2024 is not just opening doors – it’s constructing highways for capital to flow into groundbreaking ideas. This bold step, building upon previous initiatives like the Startup India program, positions India to regain its growth trajectory in the startup space. The Union Budget 2024 sends a clear message: India is not only open for business but is actively cultivating the next wave of entrepreneurs who will propel our economy forward.”
    Mr. Utkarsh Gupta, Managing Director- Ramagya Group:
    “Finance Minister Nirmala Sitharaman’s latest budget sets forth an ambitious plan to empower 41 million youth over the next five years with a central outlay of ₹2 lakh crore. This includes significant allocations for education, skilling, and employment, which are critical areas for India’s growth. The government’s decision to provide financial support for higher education loans up to ₹10 lakh will make quality education more accessible, ensuring that students from all backgrounds have the opportunity to succeed. The focus on upgrading 1,000 Industrial Training Institutes (ITIs) and aligning their curriculum with industry needs will bridge the gap between academic learning and market requirements. At Ramagya Group, we are excited about these developments and are committed to supporting the government’s vision for a skilled and educated India.”
    Conclusion:
    The Budget 2024-2025 provides a significant boost to the technological and startup ecosystem in India. By addressing key concerns like angel tax and simplifying compliance, the government is fostering an environment that encourages innovation and investment. As industry leaders express their optimism, it is evident that these measures will pave the way for sustained growth and technological advancement in the country.
    The article was curated by Prittle Prattle News as an industry story feature.
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  • Union Budget 2024-2025: Strengthening India’s Financial Landscape

    Industry Leaders Discuss Budget’s Impact on Capital Markets, Debt, and Investments

    The Union Budget 2024-2025, presented by Finance Minister Nirmala Sitharaman, has introduced several measures aimed at strengthening India’s financial sector. The budget 2024-2025 focuses on fostering sustainable growth, enhancing the stability of financial markets, and promoting investments. Here’s what industry leaders have to say about the budget’s implications for the finance sector.

    Quote on Capital Markets from Mr. Shripal Shah, MD & CEO, Kotak Securities

    “This Union Budget 2024-2025 sets a clear vision for India’s economic future, prioritizing both growth and fiscal responsibility. The increase in the tax rate on long-term capital gains and short-term capital gains on equity, along with the increase in STT on futures and options, are aimed at moderating currently heightened activity levels and fostering a more sustainable pace of growth in the stock market. We anticipate a small period of adjustment as the market adapts to these new tax measures, but this will ultimately contribute to a sustainable investment landscape with balanced and orderly growth of the capital market. Overall, this budget instills confidence in India’s growth trajectory and lays a strong foundation for the future. We remain optimistic about the long-term prospects for the Indian economy and capital markets.”

    Quote on Debt Markets from Mr. Deepak Agrawal, CIO-Debt, Kotak Mahindra AMC

    “The budget signals the continuity of the strong India macro story by pegging the fiscal deficit for FY 25 at 4.9% lower than market expectation and guiding for below 4.5% for FY 26. The budget numbers are credible given that nominal GDP growth rate is retained at 10.5%. Extra revenues from RBI have been prudently used by increasing total expenditure only by ~ 50,000 crores, while keeping capital expenditure constant and the balance being utilized in reducing the fiscal deficit. As bulk of the increase in expenditure outlay is in the form of asset creation (houses/roads etc), the budget is non-inflationary and would provide comfort to RBI on the inflation front. Commitment of fiscal consolidation in the year ahead, improves chances of India Rating upgrade in FY 2026. Given comfort on the Current Account Deficit, duty on gold/silver import was reduced to 6%.”

    Quote on Investment from Mr. Nikunj Agarwal, Head – Fund Raise, Finance & Lending Alliances, Propelld

    “The Rs 1.48 lakh crore announced in Budget 2024 for education and employment and skill enhancement is welcoming news. The financial support for loans up to Rs 10 lakh for students aiming for higher education in domestic institutions. Further, it was announced that a guarantee from a government-promoted Fund will be available Loans up to ₹7.5 lakh amount. Such initiatives in the education and skilling financing sectors are widely praised and can be seen as crucial steps towards fostering the potential of the youth, who are integral to the future growth of our nation. These measures are expected to play a pivotal role in advancing our country’s socio-economic development as a whole.”

    Mr. Uma Shankar Patro, Senior VP – Finance, InfoVision

    “InfoVision applauds the government’s commitment to advancing innovation and digital transformation with the allocation of 5% of the Universal Services Obligation Fund towards telecommunications technology R&D. The renaming of this fund to Digital Bharat Nidhi highlights the critical role of a digital-first strategy in driving economic growth. We are particularly encouraged by the introduction of the Jan Vishwas Bill 2.0 and the incentives for states to adopt Business Reforms Action Plans and embrace digitalization. These initiatives are set to significantly enhance the ease of doing business and will have a profound positive impact on the IT sector, further strengthening India’s digital economy. InfoVision fully supports these progressive measures and remains dedicated to contributing to and benefiting from these transformative efforts.”

    Quote on Bond Market from Mr. Vishal Goenka, Co-Founder of IndiaBonds.com

    “The budget demonstrated financial prudence with expected fiscal deficit target now 4.9% for FY24-25. This is constructive overall for the bond yields. The focus on infrastructure spending shall further increase issuance in infrastructure bonds. Listed bonds continue their favorable treatment for capital gains versus unlisted bonds and debt mutual funds.”

    Quote on Economic Strategy from Mr. Nitin Rao, CEO, InCred Wealth
    “Budget build up for long term measures is positive. Many key areas have a positive build-up without impacting the fiscal position. Taxation increases seem negative, though was anticipated. Markets will stabilize after the negative shocks in the short term and track the progress of the country in the medium term.”
    Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., commented, “Domestic benchmark indices opened with a gap up on Tuesday, in line with global cues. As a result, the Nifty opened positively, but after initial gains, the index witnessed heavy profit booking due to volatility surrounding the Union Budget. However, the market managed to digest the negative factors and concluded the day on a marginal negative note at 24,479 levels. Technically, the index on a daily scale formed a hammer candlestick pattern. As per this pattern, today’s low of 24,074 will act as strong support for the index. On the upside, the high of the bearish engulfing candle is placed near 24,855. Until the index conquers these levels, a sell-on-rise strategy needs to be adopted in Nifty.

    The Bank Nifty index opened with a gap up but was unable to sustain at higher levels and witnessed heavy profit booking. As a result, Bank Nifty settled the day on a negative note at 51,778 levels. Technically, the index on a daily scale is forming a lower top and lower bottom pattern, indicating weakness. On the upside, 52,000 and 52,550 will act as resistance points for Bank Nifty, while on the downside, 51,200 and 51,000 will act as key support points.”

    Lakshmi Iyer, CEO-Investment & Strategy, Kotak Alternate Asset Managers Limited, shared her perspective, “The budget has ensured fiscal discipline, while ensuring impetus to growth is not compromised upon. Pragmatism has prevailed across key announcements seen. Change in capital gains tax (increase) and increase in STT may be a near-term sentiment spoiler, however, as market focus moves to growth trajectory and earnings potential, the medium to long-term case for equities remain intact.
    No increase in government borrowing program and the sustained path to fiscal prudence could mean lower interest rates in the coming quarters. FPI continues to be net buyers in both equities and fixed income, which also adds to the liquidity flows from external sources.”
    Conclusion:
    The Union Budget 2024-2025 outlines a robust framework aimed at fostering financial stability, promoting investments, and supporting economic growth. By introducing strategic measures for capital markets, debt management, and investment facilitation, the budget seeks to create a sustainable and resilient financial ecosystem. The positive feedback from financial industry leaders underscores the budget’s potential to enhance India’s economic trajectory and build a strong foundation for future growth.
    The article was curated by Prittle Prattle News as an industry story.
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  • Union Budget 2024-2025: A Lifeline for MSMEs and Employment

    Industry Experts Applaud Budget’s Focus on MSMEs, Skilling, and Economic Growth

    The Union Budget 2024-2025, presented by Finance Minister Nirmala Sitharaman, has been well-received by industry leaders, particularly those in the MSME sector. The budget aims to bolster economic growth through strategic investments in employment, skilling, and support for small businesses. Industry experts have highlighted the significant positive impact these measures are expected to have on the overall economy and the MSME sector in particular.

    Quote on MSMEs and Employment from Mr. Om Narayan Singh, Founder of Digital Gramin Seva, IMOC Digital Financial Services Private Limited

    “I am thrilled to see the FY2024 budget presented by Financial Minister Nirmala Sitharaman which is wholly focused on employment, skilling, MSME, and the middle class to strengthen the poor, women, youth, and farmers. For employment and skilling, the government has allotted 2 lakh crore. The budget provided tech support for MSMEs by introducing credit guarantee schemes in which they will provide funds to the startups during their time of stress, which will eventually help the entrepreneurs grow even in their adversities. Along with this, another scheme has been announced, which is a self-financing guarantee fund. This scheme will operate on pooling the credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide each applicant with a guarantee of up to INR 100 crore, while the loan amount may be larger. Other than this, the limit of Mudra loans has been enhanced, earlier it was 10 lakh, which now has increased to 20 lakh rupees for those who have paid their previous loans under the Tarun Category. They want to promote ‘Vikaas bhi Virasat bhi’. To strengthen the startups, FM has announced SIDBI will open new branches to serve more MSMEs over the next three years, along with 24 new branches in FY25. The Finance Minister stated that rules and recognition for Foreign Direct Investments (FDIs) will be simplified to facilitate their inflow. This move aims to prioritize and promote the use of the Rupee for overseas investments.”

    Quote on MSME Support from Mr. Karan Sehdev, Founder of Merch Matters

    “I am overjoyed to see the government’s dedication to supporting small businesses like mine as an owner of an MSME. Our ability to dream large has increased thanks to the Atamnirbhar program, and the support of entrepreneurs has created new opportunities for growth and innovation. Our aspiration to become a major actor in the world has been neared by the Nation Corporation Policy.

    Our compliance procedures have been made simpler by the convenience of EPFO participation, and our ability to assemble a skilled workforce has been aided by employer support and skill-building programs. The ‘Vikas bhi, Virasat bhi’ methodology has made it possible for us to advance while maintaining our heritage. Our financial load has decreased thanks to the tax relief, enabling us to increase our business investments. We will also experience a paradigm shift thanks to the MSME self-financing funds for guarantee, which give us access to loans of up to 100 crores.

    The most encouraging thing, though, is the credit help at times of stress. It’s a safety net that will support us during any difficult financial times. These programs are appreciated, and I think they will help us move toward a better future. We are now an integral component of India’s development narrative rather than just little companies. We are grateful to the government for its support and for providing us the ability to soar.”

    Quote on MSME Growth from Mr. Vishal Goenka, Co-Founder of IndiaBonds.com
    “The budget demonstrated financial prudence with expected fiscal deficit target now 4.9% for FY24-25. This is constructive overall for the bond yields. The focus on infrastructure spending shall further increase issuance in infrastructure bonds. Listed bonds continue their favourable treatment for capital gains versus unlisted bonds and debt mutual funds.”
    Mr. Ashish Saraf, VP and Country Director, Thales in India
    “We applaud the government’s special emphasis on skilling, research and innovation, complementing the ‘Viksit Bharat 2047’ vision, in the Union Budget 2024-25. The Budget’s commitment to skilling 20 lakh youth over the next five years through centrally sponsored schemes and the provision of skilling loans will pave the way for cultivating a strong and future-ready workforce. These measures will create pathways for youth to gain essential skills, enhancing employability. We also welcome the focus towards inclusive and holistic growth through a number of other announcements including employment-linked skilling schemes, internship opportunities to students in 500 top companies as well as the allocation of over ₹3 lakh crore to advance women’s roles. Another key aspect of the budget is the establishment of the Powering Innovation, R&D Anusandhan National Research Fund. This will indeed provide a boost to private sector-driven research and innovation leading to development of cutting-edge technologies in the country. We commend these visionary steps and are committed to supporting India in nurturing a highly skilled workforce and deep-tech innovations by leveraging our local and global expertise and experience.”
    Conclusion:
    The Union Budget 2024-2025 stands out as a forward-looking financial plan that seeks to empower MSMEs, promote employment, and drive economic growth. By focusing on credit support, skilling, and easing compliance for small businesses, the budget addresses some of the most critical needs of the MSME sector. The positive feedback from industry leaders underscores the potential of these measures to transform the MSME landscape and contribute to India’s overall economic development. As the government implements these initiatives, the collaboration and support of various stakeholders will be vital in achieving the vision of a resilient and prosperous India.
    The article was curated by Prittle Prattle News as an industry story feature.
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